Calculate the present value of the money you will need for retirement.
1. Choose two rates of return you would like to investigate. Chose a lower, conservative number, such as the current 3 year CD rate and chose a higher, more aggressive number, such as rate of stock return. You can choose whatever you want, but justify your answer.
2. Include assumptions for your future pension (give info on how calculated such as SURS website, etc.). Subtract future pension flow from the Future Value needed in first year of retirement.
3. Include assumptions for Social Security. Do NOT just say there will be no Social Security. Get into the Social Security website and figure what your SS would be at retirement. Subtract future Social Security flow from the Future Value needed in first year of retirement.
4. Include your spouse in your calculations. It would be a good idea to include columns in your spreadsheet for both you and your spouse, since you will each have different pensions, Social Security, etc.
5. After you have set up the income flows from pensions and Social Security, you will have the amount of money you still need per year. If you are VERY fortunate, you will have enough pension and Social Security to cover your annual income/expense needs.
6. But most of you will need to save up a nest egg to use as an income flow over the years you retire.